This calculator provides the yield to maturity* and running yield* for conventional fixed-coupon bonds. The convention used for this calculation is the ISMA 30/360 standard. Conventions vary from market to market. Market convention dictates that gilt yields are calculated on an actual/actual day count basis. However, the difference between the solutions achieved by these two calculation methods are marginal and can be ignored by all but the very largest of investors. For more about yield calculations, see the section in the university.
How to use – Identify the key features of the bond in question and enter into fields. Please enter all dates as "7 Jun 2015" format. Yield can be calculated from price and vice-versa.
Important note – early redemption features such as calls or puts can adversely impact a bond’s yield. To calculate a “yield to call” or “yield to put” enter the put or call date into the maturity field. This yield calculator provides indicative yields only, based on the calculation method outlined above and is dependent on the correct inputs being entered. It is intended to be used as a guidance tool only and should not be used as the basis for any investment decisions. Please ensure you have read our full disclaimer.
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*Yield to maturity - is a calculation that takes account of both the income flows from the coupon and any capital gain or loss incurred over holding the bond to maturity. This is the best tool for evaluating bonds.
*Running yield - is a simple calculation, sometimes known as "flat yield". This calculates the annual return on money invested in terms coupon payments. It does not take into account capital gains or losses.